Crisis management essay

Managing Crisis
Projects
• Crisis management requires dealing with
stakeholders, being honest with the media
and clients, and demonstrating a sincere
concern for morality and ethics.
High Performance Organization
Response Matrix
Obama Care
• Obama has apologized for his statement of
being able to keep ones existing plan
• Millions have now signed up and millions now
have health care who didn’t have health care
previously
Iconic Crises
While the general public is generally forgiving of
crises stemming from natural disasters, this is not
the case for most man-made crises.
Hurricane Katrina
• People dying in the convention center
• Gang violence and looting delayed rescue
• Lack of leadership, politics between Louisiana
governor and New Orleans Mayor
•
•
•
•
•
•
•
•
•
•
Compilation of Lessons
Learned
Don’t ignore early warning signs.
Listen to the public & employee opinions.
Top officials (sponsors) deliver the message.
Project manager (spokesman) takes charge.
Avoid finger pointing, take ownership.
Deeds, not words, preserve credibility.
Keep the public informed, don’t lie.
Be honest regarding the severity of situation.
Show compassion and social responsibility.
Have crisis contingency plans available.
Victims vs. Villains (p.983)
The court of public opinion usually casts the
deciding ballot as to whether the company
involved in the crisis should be treated as
victims or villains. The 2 deciding factors are:
1)Demonstration of social responsibility.
2)How well you deal with the media.
Rapid response and acceptance of responsibility
is viewed favorably. The longer the situation
continues, the more negative the opinion.
FORD VERSUS FIRESTONE
• Product recalls are costly and embarrassing for the auto
industry. Improper handling of a recall can have an adverse
effect on consumer confidence and the selling price of the
stock.
• Ford and tire manufacturer Firestone are still suffering from
the repercussions of their handling of a product recall in
2000–2001.
FORD VERSUS FIRESTONE (cont)
• Ford’s CEO, Jac Nasser, tried to allay consumer fears, but his
actions did not support his words. In September of 2000, he
refused to testify at the Senate and House Commerce
Subcommittee on tire recall stating that he was too busy. In
October of 2000, Masatoshi Ono resigned as CEO of
Bridgestone, Firestone’s parent company. In October of 2001,
Jac Nasser resigned. Both executives departed and left behind
over 200 lawsuits filed against their companies.
FORD VERSUS FIRESTONE Lessons
Learned
1. Early warning signs appeared but were marginally
addressed.
2. Each company blamed the other leaving the public
with the belief that neither company could be trusted
with regard to public safety.
3. Actions must reinforce words; otherwise, the public
will become nonbelievers.
THE AIR FRANCE
CONCORDE CRASH
• On July 25, 2000, an Air France Concorde flight crashed on
takeoff killing all 109 people on board and 4 people on the
ground. Air France immediately grounded its entire Concorde
fleet pending an accident investigation. In response to media
pressure, Air France used its website for press releases,
expressed sorrow and condolence from the company, and
arranged for some financial consideration to be paid to the
relatives of the victims prior to a full legal settlement. The
chairman of Air France, Jean-Cyril Spinetta, visited the
accident scene the day of the accident and later attended a
memorial service for the victims.
THE AIR FRANCE CONCORDE CRASH
(cont)
Air France’s handling of the crisis was characterized by
fast and open communication with the media and
sensitivity for the relatives of the victims. The selling
price of the stock declined rapidly the day of the
disaster but made a quick recovery.
THE AIR FRANCE
CONCORDE CRASH
British Airways (BA) also flew the Concorde, but took a
different approach immediately following the accident.
BA waited a month before grounding all Concorde
flights indefinitely, and only after the Civil Aviation
Authority announced it would be withdrawing the
Concorde’s airworthiness certification. Eventually, the
airworthiness certification was reinstated, but it took
BA’s stock significantly longer to recover its decline in
price.
Lessons Learned from Concorde Crash
1. Air France and British Airways took different
approaches to the crisis.
2. The Air France chairman showed compassion by
visiting the site of the disaster as quickly as possible
and attending a memorial service for the victims.
British Airways did neither, thus disregarding their
social responsibility.
INTEL AND THE PENTIUM
CHIP
• Intel, the manufacturer of Pentium chips, suffered an embarrassing
moment resulting in a product recall. A mathematics professor,
while performing prime number calculations on 10-digit numbers,
discovered significant round-off errors using the Pentium chips.
Intel believed that the errors were insignificant and would show up
only in every few billion calculations. But the mathematician was
performing billions of calculations and the errors were now
significant.
• The professor informed Intel of the problem. Intel refused to take
action on the problem, stating that these errors were extremely
rare and would affect only a very small percentage of Pentium
users. The professor went public with the disclosure of the error.
INTEL AND THE
PENTIUM CHIP
• Intel created its own public relations nightmare. Its
response was slow and insincere.
• Intel tried to solve the problem solely through
technical channels and completely disregarded the
human issue of the crisis. Telling people who work in
hospitals or air traffic control that there is a flaw in
their computer but it is insignificant is not an
acceptable response. Intel spent more than a half
billion dollars in the recall, significantly more than
the cost of an immediate replacement.
Lessons Learned from Intel and the
Pentium Chip
1. Intel’s inability to take immediate responsibility for
the crisis and develop a crisis management plan made
the situation worse.
2. Intel completely disregarded public opinion.
3. Intel failed to realize that a crisis existed.
THE TYLENOL
POISONINGS
• In September 1982, seven
people died after taking
Extra-Strength Tylenol laced
with cyanide. All of the victims were relatively
young. These deaths were the first ever to result
from what came to be known as product
tampering. All seven individuals died within a oneweek time period. The symptoms of cyanide
poisoning are rapid collapse and coma and are
difficult to treat.
TYLENOL Lessons
Learned
1. On crisis projects, the (executive) project sponsor will be more
actively involved and may end up performing as the project
manager as well.
2. The project sponsor should function as the corporate
spokesperson, responsible for all crisis communications. Strong
communication skills are therefore mandatory.
3. Open and honest communications are essential, especially
with the media.
4. The company must display a social consciousness as well as a
sincere concern for people, especially victims and their families.
5. Managing stakeholders with competing demands is essential.
TYLENOL Lessons
Learned cont.
6. The company, and especially the project sponsor, must
maintain a close working relationship with the media.
7. A crisis committee should be formed and composed of the
senior-most levels of management.
8. Corporate credos can shorten the response time during a
crisis.
9. The company must be willing to seek help from all
stakeholders and possibly also government agencies.
10. Corporate social responsibility must be a much higher
priority than corporate profitability.
TYLENOL Lessons
Learned cont.
11. The company, specifically the project sponsor, must appear
at the scene of them crisis and demonstrate a sincere
compassion for the families of those injured.
12. The company must try to prevent a bad situation from
getting worse.
13. Manage the crisis as though all information is public
knowledge.
14. Act quickly and with sincerity.
15. Assume responsibility for your products and services and
your involvement in the crisis.
NESTLÉ’S MARKETING
OF INFANT FORMULA
• What happens if the corporation truly believes that they are doing
good service for humanity, but at the same time part of society
believes that an injustice has occurred?
• Such was the case at Nestlé’s where corporate management
emphatically believed that they were doing a good service for
humanity with the distribution of infant formula to Third World
nations.
• However, infant mortality, estimated to be in the thousands,
occurred in Third World nations as a result of Nestlé’s aggressive
marketing campaign.
• The product is nutritiously beneficial for the infant only if it is mixed
with water and fed through clean and sterile bottles, and stored in
refrigerators. Many consumers in Third World countries could not
meet these product requirements.
Nestle Baby Formula Crisis
Nestle Baby Formula Crisis
Nestle Baby Formula Crisis
Lessons Learned from
the Nestlé Crisis:
1. Nestlé’s actions were not representative of company
demonstrating social responsibility. Its actions may have been
legally correct, but they were also morally and ethically
incorrect.
2. Nestlé should have used the media to its advantage rather
than attacking the media. That made the situation even worse.
3. Nestlé remained in a state of denial over the crisis and refused
to accept accountability for its actions. As a result, the media
relentlessly looked for “skeletons in the closets,” found some,
and reported the results to the public.
4. Nestlé assumed that the public was ignorant of the magnitude
of the crisis.
Ch. 24 Managing Crisis
Projects
• Crisis management is the process by which an organization
deals with a major event that threatens to harm the
organization, its stakeholders, or the general public.
Managing Crisis
Projects
•some projects go bad
• some projects actually involve saving the day
from a bad situation
•Three elements are common to most definitions
of crisis: (a) a threat to the organization, (b) the
element of surprise, and (c) a short decision time
•crisis is a process of transformation where the
old system can no longer be maintained."
Therefore the fourth defining quality is the need
for change..
Managing Crisis
Projects
• When a project goes bad, time is of the
essence and sound decisions must be made
quickly, often without the benefit of any kind
of planning.
"Manage the cause not the result" (W.
Edwards Deming)
Lessons Learned from the Nestlé Crisis
(cont.)
5. The longer the crisis remains in the public’s eye, the greater
the tendency for the company to be portrayed as a villain rather
than as a victim.
6. Because of Nestlé’s inactions, the size and influence of the
boycott grew.
7. Nestlé eventually ran out of options and the corporate image
became tarnished because of inactions.
8. Nestlé neglected to realize the importance of demonstrating a
concern for people during the crisis.
THE SPACE SHUTTLE CHALLENGER
DISASTER
• On January 28, 1986, the Space Shuttle
Challenger lifted off the launch pad at
11:38 AM.
• Approximately 74 seconds into the flight, the Challenger was
engulfed in an explosive burn and all communication and telemetry
ceased. Seven brave crewmembers lost their lives.
• Following the accident, significant energy was expended trying to
ascertain whether or not the accident was predictable. Controversy
arose from the desire to assign, or to avoid, blame. Some
publications called it a
management failure, specifically in risk management,
while others called it a technical failure.
• Show Feyman Video
The following lessons were learned
from the Challenger disaster:
1. The crisis was created by a poor organizational culture.
2. There were significant early warning signs, which if addressed,
could have avoided the crisis. They were ignored.
3. The chain of command insulated managers and executives
from bad news.
4. Management refused to listen to workers who were pleading
for help.
5. There was a questionable concern for human life indicated by
the pressure to maintain the schedule at all costs.
SPACE SHUTTLE
COLUMBIA DISASTER
• On February 1, 2003, the Space Shuttle Columbia began its
reentry into the Earth’s atmosphere.
• The shuttle relied upon the heat-resistant materials and the
heat shield to protect it from the heat-producing friction
encountered during reentry.
• Unfortunately, a problem occurred and the shuttle
disintegrated during reentry into the atmosphere, killing its
seven person crew.
• The technical cause of the accident was traced to liftoff,
where a large piece of fuel tank insulation dislodged and hit
and damaged the heat-resistant tiles on the leading edge of
Columbia’s left wing and punched a hole.
SPACE SHUTTLE COLUMBIA DISASTER
(cont.)
The metal components on the shuttle melt at about 2000°F. The
heat-resistant ceramic tiles melt at about 3000°F. The tiles
prevent the 10,000°F reentry heat from penetrating the vehicle.
During reentry, the heat was then able to penetrate the left
wing, eventually melting part of the internal structure of the
wing causing it to collapse, and resulting in the shuttle tumbling
out of control during reentry.
SPACE SHUTTLE COLUMBIA
Lessons Learned from the Columbia
Disaster:
1-Risk planning was virtually nonexistent.
2. There were no contingency plans for several
of the high-risk portions of the space flight.
3. There was a silent safety program in place.
4. There was a poor transfer of knowledge,
particularly lessons learned, from the Challenger
disaster.
Victims vs. Villains
Life Cycle of a Crisis
1.
2.
3.
4.
5.
Early Warning (complaints, govt. probes, etc.)
Problem Understanding (facts vs. opinions)
Damage Assessment (throw a wide net)
Crisis Resolution (announce the approach)
Lessons Learned (study other’s mistakes)*
Project managers must deal with all the
stakeholders & need strong communication,
conflict resolution and negotiation skills.
Show Crisis Management Video
Crisis Management Elements
•
•
•
•
•
•
•
•
•
Leader of the Crisis Team.
Crisis Committee.
Crisis Communications.
Stakeholder Management.
Assume Responsibility.
Response Time.
Compassion.
Documentation.
Capture Lessons Learned.
Project Crises Management-What can
Cause a Crises
• A significant risk is discovered during the
execution of the project
• A need for a scope change is discovered when
the projected is just about finished
• An influential minor stakeholder changes their
mind about the project and expresses their
opinions to management
• A design flaw is uncovered during the
exectuion
Crises Communication
• The most challenging part of crisis
communication management is reacting - with
the right response - quickly. This is because
behavior always precedes communication.
Non-behavior or inappropriate behavior leads
to spin, not communication. In emergencies,
it's the non-action and the resulting spin that
cause embarrassment, humiliation, prolonged
visibility, and unnecessary litigation.
Best Response
Be proactive. Break bad news yourself so you
can ensure your side of the story is heard.
Waiting for someone else to tell it means you
will only be responding and not able to
contextualize the issue in the most helpful
way. Reach out to the media and make your
website a destination by updating it with the
information the media and the public want,
including the bad news
Flight 370??
• Malaysian Air Line
• Blamed for keeping secret
information that has been
gathered
Rocket Explodes at Launch
Orbital Sciences
Hyundai, Kia agree to
$360M mpg
settlement
• Washington — Korean automakers Hyundai Motor
Co. and Kia Motors Corp. announced Monday they
have agreed to a record-setting $360 million
settlement for overstating fuel economy ratings. The
agreement ends the Environmental Protection
Agency's two-year investigation into the automakers'
overstatement of mileage ratings for 1.2 million
2011-13 U.S. vehicles.
•
•
•
Project Management Homework –Crisis Projects
You are the project manager of a $10 Million renovation project of the Old Science
building on the X campus. Part of the project includes the removal and
replacement of asbestos roofing material. During the course of the project due to
negligence of a piping contractor you hired there is a natural gas leak in the
building resulting in an explosion which blows a section of the roof off the building
releasing a large amount of asbestos dust into the atmosphere around the campus
and the East end of city where the school is located. Using the methods discussed
in Chapter 24 (Managing Crises Projects) what would be the best approach in
remediating the situation with the student population exposed to the hazardous
dust, the East end community action group who is about to file a lawsuit. In just
two pages discuss the appropriate action, who are the stakeholders, where will
you obtain the funds to perform the appropriate remediation, and how you will
handle the news media. You also see on TV that several local law forms are
running ads encouraging students and citizens to call them to obtain
representation in a lawsuit claiming damage to their personal health due to
asbestos exposure.

Managing Crisis
Projects
• Crisis management requires dealing with
stakeholders, being honest with the media
and clients, and demonstrating a sincere
concern for morality and ethics.
High Performance Organization
Response Matrix
Obama Care
• Obama has apologized for his statement of
being able to keep ones existing plan
• Millions have now signed up and millions now
have health care who didn’t have health care
previously
Iconic Crises
While the general public is generally forgiving of
crises stemming from natural disasters, this is not
the case for most man-made crises.
Hurricane Katrina
• People dying in the convention center
• Gang violence and looting delayed rescue
• Lack of leadership, politics between Louisiana
governor and New Orleans Mayor
•
•
•
•
•
•
•
•
•
•
Compilation of Lessons
Learned
Don’t ignore early warning signs.
Listen to the public & employee opinions.
Top officials (sponsors) deliver the message.
Project manager (spokesman) takes charge.
Avoid finger pointing, take ownership.
Deeds, not words, preserve credibility.
Keep the public informed, don’t lie.
Be honest regarding the severity of situation.
Show compassion and social responsibility.
Have crisis contingency plans available.
Victims vs. Villains (p.983)
The court of public opinion usually casts the
deciding ballot as to whether the company
involved in the crisis should be treated as
victims or villains. The 2 deciding factors are:
1)Demonstration of social responsibility.
2)How well you deal with the media.
Rapid response and acceptance of responsibility
is viewed favorably. The longer the situation
continues, the more negative the opinion.
FORD VERSUS FIRESTONE
• Product recalls are costly and embarrassing for the auto
industry. Improper handling of a recall can have an adverse
effect on consumer confidence and the selling price of the
stock.
• Ford and tire manufacturer Firestone are still suffering from
the repercussions of their handling of a product recall in
2000–2001.
FORD VERSUS FIRESTONE (cont)
• Ford’s CEO, Jac Nasser, tried to allay consumer fears, but his
actions did not support his words. In September of 2000, he
refused to testify at the Senate and House Commerce
Subcommittee on tire recall stating that he was too busy. In
October of 2000, Masatoshi Ono resigned as CEO of
Bridgestone, Firestone’s parent company. In October of 2001,
Jac Nasser resigned. Both executives departed and left behind
over 200 lawsuits filed against their companies.
FORD VERSUS FIRESTONE Lessons
Learned
1. Early warning signs appeared but were marginally
addressed.
2. Each company blamed the other leaving the public
with the belief that neither company could be trusted
with regard to public safety.
3. Actions must reinforce words; otherwise, the public
will become nonbelievers.
THE AIR FRANCE
CONCORDE CRASH
• On July 25, 2000, an Air France Concorde flight crashed on
takeoff killing all 109 people on board and 4 people on the
ground. Air France immediately grounded its entire Concorde
fleet pending an accident investigation. In response to media
pressure, Air France used its website for press releases,
expressed sorrow and condolence from the company, and
arranged for some financial consideration to be paid to the
relatives of the victims prior to a full legal settlement. The
chairman of Air France, Jean-Cyril Spinetta, visited the
accident scene the day of the accident and later attended a
memorial service for the victims.
THE AIR FRANCE CONCORDE CRASH
(cont)
Air France’s handling of the crisis was characterized by
fast and open communication with the media and
sensitivity for the relatives of the victims. The selling
price of the stock declined rapidly the day of the
disaster but made a quick recovery.
THE AIR FRANCE
CONCORDE CRASH
British Airways (BA) also flew the Concorde, but took a
different approach immediately following the accident.
BA waited a month before grounding all Concorde
flights indefinitely, and only after the Civil Aviation
Authority announced it would be withdrawing the
Concorde’s airworthiness certification. Eventually, the
airworthiness certification was reinstated, but it took
BA’s stock significantly longer to recover its decline in
price.
Lessons Learned from Concorde Crash
1. Air France and British Airways took different
approaches to the crisis.
2. The Air France chairman showed compassion by
visiting the site of the disaster as quickly as possible
and attending a memorial service for the victims.
British Airways did neither, thus disregarding their
social responsibility.
INTEL AND THE PENTIUM
CHIP
• Intel, the manufacturer of Pentium chips, suffered an embarrassing
moment resulting in a product recall. A mathematics professor,
while performing prime number calculations on 10-digit numbers,
discovered significant round-off errors using the Pentium chips.
Intel believed that the errors were insignificant and would show up
only in every few billion calculations. But the mathematician was
performing billions of calculations and the errors were now
significant.
• The professor informed Intel of the problem. Intel refused to take
action on the problem, stating that these errors were extremely
rare and would affect only a very small percentage of Pentium
users. The professor went public with the disclosure of the error.
INTEL AND THE
PENTIUM CHIP
• Intel created its own public relations nightmare. Its
response was slow and insincere.
• Intel tried to solve the problem solely through
technical channels and completely disregarded the
human issue of the crisis. Telling people who work in
hospitals or air traffic control that there is a flaw in
their computer but it is insignificant is not an
acceptable response. Intel spent more than a half
billion dollars in the recall, significantly more than
the cost of an immediate replacement.
Lessons Learned from Intel and the
Pentium Chip
1. Intel’s inability to take immediate responsibility for
the crisis and develop a crisis management plan made
the situation worse.
2. Intel completely disregarded public opinion.
3. Intel failed to realize that a crisis existed.
THE TYLENOL
POISONINGS
• In September 1982, seven
people died after taking
Extra-Strength Tylenol laced
with cyanide. All of the victims were relatively
young. These deaths were the first ever to result
from what came to be known as product
tampering. All seven individuals died within a oneweek time period. The symptoms of cyanide
poisoning are rapid collapse and coma and are
difficult to treat.
TYLENOL Lessons
Learned
1. On crisis projects, the (executive) project sponsor will be more
actively involved and may end up performing as the project
manager as well.
2. The project sponsor should function as the corporate
spokesperson, responsible for all crisis communications. Strong
communication skills are therefore mandatory.
3. Open and honest communications are essential, especially
with the media.
4. The company must display a social consciousness as well as a
sincere concern for people, especially victims and their families.
5. Managing stakeholders with competing demands is essential.
TYLENOL Lessons
Learned cont.
6. The company, and especially the project sponsor, must
maintain a close working relationship with the media.
7. A crisis committee should be formed and composed of the
senior-most levels of management.
8. Corporate credos can shorten the response time during a
crisis.
9. The company must be willing to seek help from all
stakeholders and possibly also government agencies.
10. Corporate social responsibility must be a much higher
priority than corporate profitability.
TYLENOL Lessons
Learned cont.
11. The company, specifically the project sponsor, must appear
at the scene of them crisis and demonstrate a sincere
compassion for the families of those injured.
12. The company must try to prevent a bad situation from
getting worse.
13. Manage the crisis as though all information is public
knowledge.
14. Act quickly and with sincerity.
15. Assume responsibility for your products and services and
your involvement in the crisis.
NESTLÉ’S MARKETING
OF INFANT FORMULA
• What happens if the corporation truly believes that they are doing
good service for humanity, but at the same time part of society
believes that an injustice has occurred?
• Such was the case at Nestlé’s where corporate management
emphatically believed that they were doing a good service for
humanity with the distribution of infant formula to Third World
nations.
• However, infant mortality, estimated to be in the thousands,
occurred in Third World nations as a result of Nestlé’s aggressive
marketing campaign.
• The product is nutritiously beneficial for the infant only if it is mixed
with water and fed through clean and sterile bottles, and stored in
refrigerators. Many consumers in Third World countries could not
meet these product requirements.
Nestle Baby Formula Crisis
Nestle Baby Formula Crisis
Nestle Baby Formula Crisis
Lessons Learned from
the Nestlé Crisis:
1. Nestlé’s actions were not representative of company
demonstrating social responsibility. Its actions may have been
legally correct, but they were also morally and ethically
incorrect.
2. Nestlé should have used the media to its advantage rather
than attacking the media. That made the situation even worse.
3. Nestlé remained in a state of denial over the crisis and refused
to accept accountability for its actions. As a result, the media
relentlessly looked for “skeletons in the closets,” found some,
and reported the results to the public.
4. Nestlé assumed that the public was ignorant of the magnitude
of the crisis.
Ch. 24 Managing Crisis
Projects
• Crisis management is the process by which an organization
deals with a major event that threatens to harm the
organization, its stakeholders, or the general public.
Managing Crisis
Projects
•some projects go bad
• some projects actually involve saving the day
from a bad situation
•Three elements are common to most definitions
of crisis: (a) a threat to the organization, (b) the
element of surprise, and (c) a short decision time
•crisis is a process of transformation where the
old system can no longer be maintained."
Therefore the fourth defining quality is the need
for change..
Managing Crisis
Projects
• When a project goes bad, time is of the
essence and sound decisions must be made
quickly, often without the benefit of any kind
of planning.
"Manage the cause not the result" (W.
Edwards Deming)
Lessons Learned from the Nestlé Crisis
(cont.)
5. The longer the crisis remains in the public’s eye, the greater
the tendency for the company to be portrayed as a villain rather
than as a victim.
6. Because of Nestlé’s inactions, the size and influence of the
boycott grew.
7. Nestlé eventually ran out of options and the corporate image
became tarnished because of inactions.
8. Nestlé neglected to realize the importance of demonstrating a
concern for people during the crisis.
THE SPACE SHUTTLE CHALLENGER
DISASTER
• On January 28, 1986, the Space Shuttle
Challenger lifted off the launch pad at
11:38 AM.
• Approximately 74 seconds into the flight, the Challenger was
engulfed in an explosive burn and all communication and telemetry
ceased. Seven brave crewmembers lost their lives.
• Following the accident, significant energy was expended trying to
ascertain whether or not the accident was predictable. Controversy
arose from the desire to assign, or to avoid, blame. Some
publications called it a
management failure, specifically in risk management,
while others called it a technical failure.
• Show Feyman Video
The following lessons were learned
from the Challenger disaster:
1. The crisis was created by a poor organizational culture.
2. There were significant early warning signs, which if addressed,
could have avoided the crisis. They were ignored.
3. The chain of command insulated managers and executives
from bad news.
4. Management refused to listen to workers who were pleading
for help.
5. There was a questionable concern for human life indicated by
the pressure to maintain the schedule at all costs.
SPACE SHUTTLE
COLUMBIA DISASTER
• On February 1, 2003, the Space Shuttle Columbia began its
reentry into the Earth’s atmosphere.
• The shuttle relied upon the heat-resistant materials and the
heat shield to protect it from the heat-producing friction
encountered during reentry.
• Unfortunately, a problem occurred and the shuttle
disintegrated during reentry into the atmosphere, killing its
seven person crew.
• The technical cause of the accident was traced to liftoff,
where a large piece of fuel tank insulation dislodged and hit
and damaged the heat-resistant tiles on the leading edge of
Columbia’s left wing and punched a hole.
SPACE SHUTTLE COLUMBIA DISASTER
(cont.)
The metal components on the shuttle melt at about 2000°F. The
heat-resistant ceramic tiles melt at about 3000°F. The tiles
prevent the 10,000°F reentry heat from penetrating the vehicle.
During reentry, the heat was then able to penetrate the left
wing, eventually melting part of the internal structure of the
wing causing it to collapse, and resulting in the shuttle tumbling
out of control during reentry.
SPACE SHUTTLE COLUMBIA
Lessons Learned from the Columbia
Disaster:
1-Risk planning was virtually nonexistent.
2. There were no contingency plans for several
of the high-risk portions of the space flight.
3. There was a silent safety program in place.
4. There was a poor transfer of knowledge,
particularly lessons learned, from the Challenger
disaster.
Victims vs. Villains
Life Cycle of a Crisis
1.
2.
3.
4.
5.
Early Warning (complaints, govt. probes, etc.)
Problem Understanding (facts vs. opinions)
Damage Assessment (throw a wide net)
Crisis Resolution (announce the approach)
Lessons Learned (study other’s mistakes)*
Project managers must deal with all the
stakeholders & need strong communication,
conflict resolution and negotiation skills.
Show Crisis Management Video
Crisis Management Elements
•
•
•
•
•
•
•
•
•
Leader of the Crisis Team.
Crisis Committee.
Crisis Communications.
Stakeholder Management.
Assume Responsibility.
Response Time.
Compassion.
Documentation.
Capture Lessons Learned.
Project Crises Management-What can
Cause a Crises
• A significant risk is discovered during the
execution of the project
• A need for a scope change is discovered when
the projected is just about finished
• An influential minor stakeholder changes their
mind about the project and expresses their
opinions to management
• A design flaw is uncovered during the
exectuion
Crises Communication
• The most challenging part of crisis
communication management is reacting - with
the right response - quickly. This is because
behavior always precedes communication.
Non-behavior or inappropriate behavior leads
to spin, not communication. In emergencies,
it's the non-action and the resulting spin that
cause embarrassment, humiliation, prolonged
visibility, and unnecessary litigation.
Best Response
Be proactive. Break bad news yourself so you
can ensure your side of the story is heard.
Waiting for someone else to tell it means you
will only be responding and not able to
contextualize the issue in the most helpful
way. Reach out to the media and make your
website a destination by updating it with the
information the media and the public want,
including the bad news
Flight 370??
• Malaysian Air Line
• Blamed for keeping secret
information that has been
gathered
Rocket Explodes at Launch
Orbital Sciences
Hyundai, Kia agree to
$360M mpg
settlement
• Washington — Korean automakers Hyundai Motor
Co. and Kia Motors Corp. announced Monday they
have agreed to a record-setting $360 million
settlement for overstating fuel economy ratings. The
agreement ends the Environmental Protection
Agency's two-year investigation into the automakers'
overstatement of mileage ratings for 1.2 million
2011-13 U.S. vehicles.
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Project Management Homework –Crisis Projects
You are the project manager of a $10 Million renovation project of the Old Science
building on the X campus. Part of the project includes the removal and
replacement of asbestos roofing material. During the course of the project due to
negligence of a piping contractor you hired there is a natural gas leak in the
building resulting in an explosion which blows a section of the roof off the building
releasing a large amount of asbestos dust into the atmosphere around the campus
and the East end of city where the school is located. Using the methods discussed
in Chapter 24 (Managing Crises Projects) what would be the best approach in
remediating the situation with the student population exposed to the hazardous
dust, the East end community action group who is about to file a lawsuit. In just
two pages(line size 12 and one space not double space between lines ) discuss the
appropriate action, who are the stakeholders, where will you obtain the funds to
perform the appropriate remediation, and how you will handle the news media.
You also see on TV that several local law forms are running ads encouraging
students and citizens to call them to obtain representation in a lawsuit claiming
damage to their personal health due to asbestos exposure.